5 Tips to Create Healthy Financial Habits
Lots of us have a difficult relationship with our finances. Whether you struggle with debt, overspending, or feeling anxious about money, it’s common to just not want to think about it.
However, knowing and understanding your habits is the key to getting your finances in shape. You might want to save up for a mortgage, pay off debts, or simply establish healthier money habits.
Whatever your situation, MasLife believes that a mindful approach to money gives you calmness and control. Getting your finances in order can seem like a daunting task, but certain small, easy adjustments to your habits can have a powerful effect on your overall financial health. In this article, we look at the most important changes you can make to your relationship with money.
Start by Tracking Your Spending
Just knowing where your money is going is a simple but effective first step. Once you understand where your money is going, you will be more empowered to make changes.
You can track your outgoings with a daily spending diary. Many of us think we know what our habits are, but this exercise will give you greater insight into your spending.
If you’re no stranger to nasty shocks when you check your balance, you may think that spending on big-ticket items such as travelling or new technology is to blame. However, ‘microspending’ is often the culprit. These are transactions we make without thinking: those quick trips to Pret or sweet treats to get you through the day.
Luckily, a new generation of banking apps has arrived to help you track these expenses. MasLife allows you to Mood Tag your transactions, helping you to understand how your wellbeing affects your money habits and how your spending makes you feel.
With this fresh, wellness-driven approach to understanding your money, MasLife helps you to reflect on your habits and how to change them.
Prioritise Your Debts
If you are debt-free, well done! However, if you owe money, you’re not alone: the majority of UK adults are paying off some kind of debt such as a mortgage, personal loan, or credit card bill. The good news is that being strategic with your repayments can help you clear debt quicker.
Prioritise debts with the highest interest rates. These are the ones that cost you the most money each month. Figuring out which debts to pay off in which order enables you to avoid extra fees and mounting interest.
Getting organised is crucial for clearing debts. Apps that keep track of your money, such as MasLife, can help you get a handle on your repayment schedules. Once you pay off your debts, you can start with a clean slate again.
Set Aside for Savings
No matter how much or how little you earn, it’s important to add regularly to your savings. Transferring money into your savings account as soon as you get paid is an effective way to build up your nest egg. You can even set up a standing order to move the money automatically into your savings account.
It’s also crucial to set goals. You might have a set amount you want to put into your ISA each month, or perhaps you have a certain amount of money you want to save on unnecessary purchases such as takeaways. MasLife has budgeting tools that allow you to establish these goals and stay on track to meet them.
All these little lifestyle choices have a slow but steady impact on your overall financial health – so take control with budgeting tools.
Know Your Balance
We’re all guilty of tapping our card at the checkout and just hoping for the best! However, you shouldn’t be afraid of keeping an eye on your balance.
Banking apps allow you to check how much you’ve got in your account quickly and easily. Try to check everyday – perhaps first thing in the morning – so you can keep track of whether you’re meeting your budgeting targets.
Apps such as MasLife also have instant notifications to let you know when your balance hits a certain amount.
Many of us don’t keep track of our balance because it’s stressful – but MasLife helps you to take a calmer, more mindful approach to your finances with meditations and wellness tools.
Many think that Open Banking is about changing a bank. Or something dangerous. Open Banking (aka PSD2) forces the biggest UK banks to open up their precious data, which could mean big changes for the way we use money.
Now, in English, you might be thinking. Thanks to Open Banking, companies like Uswitch can see where you are spending money for your bills and help you find the best deals for energy, broadband or your mobile phone. It might only be £15 a month, but times 12…!
Then apps like Upside give you automatic cashback on your purchases - on money you have already spent. Who doesn’t want some of it back?
You don’t need to understand the nitty-gritty of Open Banking. Remember to be clever and look for apps which help you save money. At MasLife, we think that understanding your financial situation helps you to feel calmer and more in control, which equips you to make healthier choices about money.
If there’s one message we want to get across, it’s the importance of investing time and energy in improving your finances – and, by extension, your wellbeing.
Now you can use powerful financial technology to set yourself up to succeed. Taking little steps now such as downloading a banking app could help get you on the road to better finances. If you get into the habit of spending and saving more mindfully today, you can eventually achieve future goals such as applying for a mortgage.
Taking care of your finances is taking care of your wellbeing and your future. MasLife inspires and equips you to achieve these aims with its innovative combination of financial, lifestyle and wellness tools. You can find out more and sign up here.